Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby

Exercise 44

Inferring Merchandise Purchases
The Gap, Inc. , is a specialty retailer that operates stores selling clothes under the trade names Gap, Banana Republic, and Old Navy. Assume that you are employed as a stock analyst and your boss has just completed a review of the annual report of The Gap, Inc., for the year ended January 31, 2011. She provided you with her notes, but they are missing some information that you need. Her notes show that the ending inventory for Gap in the current year was $1,602 million and in the previous year it was $1,477 million. Net Sales for the current year were $14,664 million. Gross Profit was $5,889 million and Net Income was $1,204 million. For your analysis, you determine that you need to know the amount of Cost of Goods Sold and Purchases for the year.
Required:
Do you need to ask your boss for her copy of the annual report, or can you develop the information from her notes Explain and show calculations.